PhonePe launches credit line on UPI

By integrating with PhonePe PG, customers and merchants can now enable ‘Credit Line on UPI’ as a payment method, reducing cart abandonment and boosting sales, Phonepe said.

PhonePe, a leading digital payments platform, announced the launch of its new feature, Credit Line on UPI, on August 22. This move allows consumers to link pre-approved credit lines from their banks to UPI and make seamless payments across millions of merchants.

This development follows the Reserve Bank of India's (RBI) recent decision to expand the scope of UPI to include pre-approved credit lines, called ‘Credit Line on UPI’. The feature allows consumers to access credit through banks and use it via UPI apps.

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The digital payments platform said customers and merchants using the PhonePe Payment Gateway (PG) will also benefit from this new payment option, which offers more flexibility at checkout. By integrating with PhonePe PG, merchants can now enable ‘Credit Line on UPI’ as a payment method, reducing cart abandonment and boosting sales, it said.

Commenting on the launch, Deep Agrawal, Head of Payments at PhonePe said: “We are excited to launch Credit Line on UPI on our platform. This is the second offering that will unlock the potential of credit usage on UPI, following the tremendous success of Rupay Credit Cards on UPI. We believe digital payments in India is growing strength to strength and PhonePe is committed to providing the most innovative and best-in-class solutions to our customers. This offering will revolutionise the access and use of credit in the country and we are focussed on offering a varied set of new use cases in close partnership with the ecosystem players.”

Here’s how users can avail it:

1. Users can link their Credit Line on UPI by clicking on the profile section on the top left of the PhonePe app home page and select the bank from which they availed the Credit Line.
2. The Credit Line associated with their registered phone number will be linked on UPI upon clicking on the bank.
3. After linking, the user will be required to set a UPI PIN
4. Once this is done, the Credit Line option will show up as a payment instrument on the payment page while the user is making a payment.